PDF PUBLIC SERVICE LOAN FORGIVENESS (PSLF)

1/24/2018

PUBLIC SERVICE LOAN FORGIVENESS

(PSLF)

Frankie Everett Financial Aid Director

What is Public Service Loan Forgiveness?

The Public Service Loan Forgiveness (PSLF) Program allows eligible borrowers to cancel the remaining balance of their Direct Loans.

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120 Qualifying Payments

PSLF BASICS

In Qualifying Repayment Plans

...When Applying For & Receiving PSLF

Per IRS, forgiven amount is not taxable income

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On Direct Loans

While Working For A Qualifying Employer...

120 Qualifying Payments

Must have been made after October 1, 2007

Must be on-time

(no later than 15 days after the scheduled due date)

Must be made each month

(satisfying the full monthly installment amount that was due for that month)

Must be made when the loan is not in a default status

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** Reduced and/or zero dollar monthly payments under an IDR plan qualify.

** Lump sum payments that exceed the scheduled payment amount do not count as separate payments.

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PSLF PAYMENTS

? Payments made while in default status do not count ? Multiple partial payments

? Count as one payment ? All must be received within 15 days of due date

? Payments made when not required

? Do not qualify

? Lump sum payments

? Count as one payment ? Exceptions for AmeriCorps, Peace Corp, and

Department of Defense borrowers

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On Direct Loans

Perkins Loans - NO FFELP Loans - NO Parent PLUS Loans ? YES* Direct Consolidation Loan - YES

PSLF is only for Direct Loans, but all Direct Loans qualify

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Revised Pay As You Earn

(REPAYE)

Income-Based Repayment Plan

(IBR)

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In Qualifying Repayment Plans

Pay As You Earn (PAYE)

Income-Contingent Repayment Plan (ICR)

PAYMENT AMOUNTS 8

Most IDR plans have two formulas ? for those that do, borrowers always pay the lesser of the two.

Repayment Plan

ICR

Payment based only on income

20% of discretionary income

Payment based on loan debt

12-year standard payment adjusted based on income

IBR PAYE REPAYE

15% of discretionary income

10% of discretionary income

10% of discretionary income

10-year standard amount 10-year standard amount None

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While Working For A Qualifying Employer... It matters where you work, not what you do...

501(c)(3) not-for-profit organization

Other not-for-profit organizations providing specific qualifying services as primary purpose

Any government organization

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PSLF FULL-TIME EMPLOYMENT

? Full-time is the greater of:

? Employer's definition of full-time ? 30 hours per week

? May work multiple qualifying part-time jobs that equal full-time

? Employer-provided vacation or leave time is equivalent to hours worked in determining whether you meet the full-time employment requirement. This includes leave taken for a qualifying condition under FMLA.

Note: When determining full-time public service employment at a not-for-profit organization, you may not include time spent participating in religious instruction, worship service, or any form of proselytizing.

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